Maurie invested $17,000 in stock X, Y, Z. The amounts, expected returns, and the beta coefficient of

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Maurie invested $17,000 in stock X, Y, Z. The amounts, expected returns, and the beta coefficient of each of the stock is given below:

Stock X: $4,200; Expected returns: 18.5%; and Beta: 1.03

Stock Y: $5,100; Expected returns: 15.6%; and Beta: 0.92

Stock Z: $6,800; Expected returns: 21.0%; and Beta: 0.98

a) Calculate the Expected returns of Maurie’s portfolio. (3 points)

b) Of the 3 stocks which one has the highest systematic risk compared to the overall market and explain why? (1 point)

c) Calculate the Portfolio Beta. (2 points)

d) Interpret the systematic risk of the portfolio based on the Portfolio Beta. (1 point)

Related Book For answer-question

Fundamentals of Financial Management

ISBN: 978-1305635937

Concise 9th Edition

Authors: Eugene F. Brigham

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Posted Date: Aug 22, 2023 02:39 AM

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Maurie invested $17,000 in stock X, Y, Z. The amounts, expected returns, and the beta coefficient of

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a To calculate the expected returns of Mauries portfolio you need to multiply the amount invested in ... View the full answer

Fundamentals of Financial Management

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